FTC Found Funeral Rule Violations in 23% Of Funeral Homes Visited in 2011

April 20, 2012
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Washington, D.C. – Investigators working undercover in nine states detected significant violations of Federal Trade Commission consumer protection requirements in 23 of 102 funeral homes visited during 2011, according to a press release.

The FTC conducts undercover inspections every year to make sure funeral homes are complying with the agency’s Funeral Rule. Key provisions of the Funeral Rule, which was issued in 1984, require funeral homes to provide consumers with an itemized price list at the start of an in-person discussion of funeral arrangements, as well as a casket price list before consumers view any caskets. The Funeral Rule also prohibits funeral homes from requiring consumers to buy any item, such as a casket, as a condition of obtaining any other funeral good or service. By requiring itemized prices, the Funeral Rule enables consumers to compare prices and buy only the goods and services wanted.

FTC inspections during 2011 encountered varying levels of compliance:

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• In northwest Indiana, one of 12 funeral homes inspected had significant violations.
• In Maui, Hawaii, none of the four funeral homes inspected had significant violations.
• In the New York City area, as well as parts of Connecticut and New Jersey, one of 22 funeral homes inspected had significant violations.
• In Cleveland, Ohio, four of 16 funeral homes inspected had significant violations.
• In Austin, Texas, four of 19 funeral homes inspected had significant violations.
In addition, the FTC identified 33 funeral homes within the nine states with only minor compliance deficiencies. In such cases, the FTC contacts the funeral home and requires it to provide evidence that it has corrected the problems.

Funeral homes with significant violations can enter a training program designed to increase compliance with the Funeral Rule. The three-year program, the Funeral Rule Offenders Program (FROP), is an alternative to an FTC lawsuit that could lead to a federal court order and civil penalties of up to $16,000 per violation.

The FROP program is run by NFDA and provides participants with a legal review of the price disclosures required by the Funeral Rule and ongoing training, testing and monitoring for compliance. In addition, funeral homes that participate in the program make a voluntary payment to the U.S. Treasury in place of a civil penalty and pay annual administrative fees to the association.

Since the FROP program began in 1996, the FTC has inspected more than 2,500 funeral homes and found fewer than 400 engaged in significant Funeral Rule violations. In conducting its annual enforcement sweeps, the agency has received assistance from several state attorneys general.

Article Republished with permission from Memorial Business Journal

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